President-elect Donald Trump and Congressional leaders have been very clear that repealing the Affordable Care Act is a top priority as soon as Congress returns to town in January. While Republican leaders have long talked about “repeal and replace”, the replace part of the equation is a lot harder to figure out. As a result, it is possible that Congress will move quickly to repeal the ACA and leave us guessing as to what the “replace” would look like.
So let’s tease out what the implications would be for children and families of a straight repeal of the ACA with just a promise of “something terrific” down the road.
Most attention on the ACA is focused on the marketplace – other health policy experts have addressed the serious disruption that will occur in that world – though it is worth noting that approximately one million children are getting covered through the state and federal marketplaces. So I am going to focus on other aspects of the ACA that have received far less attention.
Repeal of the Medicaid expansion
According to CBO ten million newly eligible people are being covered as a result of Medicaid expansion funding. In the 2015 reconciliation package that Congress passed and President Obama vetoed, funding and legal authority to cover this group was rescinded. We don’t know precisely how many of these ten million newly-insured individuals are parents with children currently in the home, but it would likely range from about a quarter to one-third depending on the state. We have explained elsewhere why parents having coverage is critically important for children in some detail.
Another important indirect effect of repealing expansion and the ACA in general is that children have benefited from a “welcome mat” effect – which, as regular readers of SayAhhh! know, results from the fact that two-thirds of uninsured children are eligible for Medicaid and/or CHIP but are not currently enrolled. CBO has referred to this effect and says that while it is hard to quantify how many children have enrolled because of the welcome mat effect, it is likely in the range of two million. (They don’t pull out children but children are likely to be the vast majority of those in that number because they are the largest group of Medicaid eligibles).
The historic level of 95% coverage for children in 2015 that we discussed in our recent paper is due in part to this welcome mat effect.
Lifting the Prohibition on States Lowering their Children’s Income Eligibility Levels
Known by the more wonky name as the “maintenance of effort” provision, drafters of the ACA decided that it would be best not to mess with success since the current system of Medicaid and CHIP is working so well and has brought the uninsured rate for children to a historic low. The ACA includes a provision that ensures that states cannot roll back eligibility for kids in Medicaid and CHIP until 2019. That provision is likely to be eliminated in any repeal bill as it was lifted in the reconciliation bill that passed in 2015.
Elimination of the enhanced 23% match for the Children’s Health Insurance Program (CHIP)
This is also likely to be featured in a repeal bill since this was included in the 2015 reconciliation bill.
The combination of cutting states’ funding and giving them more tools to restrict the enrollment of children in Medicaid or CHIP coverage (i.e. lifting the MOE) is exactly the combination that raises red flags and forces states to make bad choices for children. It would have an immediate effect on children’s coverage in Arizona, where state statute directs the Medicaid agency to freeze enrollment in their newly re-opened CHIP program if federal funding diminishes.
Those three provisions seem to be very likely to be included in a repeal bill based on the 2015 reconciliation bill, but if we really take our new leaders at their word and they completely repeal the ACA, there may be a few other important provisions that quietly disappear. One key issue that we will explore in a future blog is the elimination of the new income standard for Medicaid determinations known fondly as MAGI. My colleague Tricia Brooks has blogged extensively here on MAGI and indeed wrote a whole primer on it, because it is very complicated.
Bottomline for non-eligibility wonks about eliminating MAGI – it would create an enormous burden for states to change their eligibility systems again after they just went through a long and difficult process to convert to MAGI. It would also likely result in a small mandatory decline in the income eligibility levels for children for reasons we will also explore in a future blog.
Other provisions that could be on the chopping block if the ACA is repealed wholesale include coverage for former foster youth who aged out of foster care but can currently stay on Medicaid up to age 26 (these are kids who we can feel confident won’t be jumping on their parent’s employer plan even if that remains an option); extremely sick children who are receiving hospice care may see their options limited; and funds for home visiting programs that provide support to parents with young children would go away.